How should i move forward
I have been reading for some time and i pulled the trigger on a property. i would love to buy another rental or two or ten over the next couple years but i dont know how to move forward/how to fund my plan.
my primary residence is in NJ. my modest salary combined with 6500/year in property taxes and my conventional note eats up a bulk of my DTI. my front end comes in at around 39%. i have a great fico, 10k liquid, another 10k in available credit via credit cards...
i own a rental property free and clear. it should appraise for over 40k. i booked my first tenant last month paying 700/month which after taxes and insurance and water bill i net 500. (philadelphia taxes are about 500 a year) zero repairs needed thus far.
if i save over the next year i can buy a turnkey rental for 25k, cash, that will rent for about 650...after taxes and insurance and water bill i should clear 450. assuming i wouldnt need any major repairs that should equate a 21% ROI.
but i dont want to wait! so how should i move forward??
is there any lender where i can put down 20% and borrow a 30yr note for a second/investment property that do NOT have a minimum?? i would love to put down 6k and borrow 24k. my monthly payment for something like that would be low enough that i would be able to gain more qualifying income after my expenses.
that would allow me to i spoke to a credit union in phila and the longest note they will do is 15yr for a second home but my rate is over 6%. i would be able to cover the debt service but there wouldnt be much profit in that!
i see people using a LOC to buy a property and once they have a tenant then refi/cash out...rince and repeat. i can get a LOC on my rental that i own free and clear but will my DTI be able to refi the property so quick? if my salary from my 9-5 wouldnt make the cut i can use the rental income only if i had 2 years of seasoning period on my tax returns??